Do you have the vision, determination and commitment of swimmer Michael Phelps? You might not have his 6′ 4″ tall frame and dolphin-like body, but even as investors we can learn from his stunning achievements.
I let go of my Olympic dreams when medical complications sent me to hospital aged 18. Before then, I’d been a fairly promising sprinter and was also testing my ability over middle distances. After, I was grateful to be able to walk around without pain. My hopes of becoming a competitive athlete were over, but I’d learned not to take anything in life for granted. It might be one reason I’m so happy to save for tomorrow rather than spend more than I earn today. I enjoy the little things, and live for the big things.
Even though my chances of winning an Olympic gold are now about as good as Paris Hilton’s, I still find it inspiring to watch the Olympic athletes. A winner like Phelps should give all of us a kick, whatever we want to achieve.
Here’s what I take from watching the great man when it comes to finances:
1. Visualize your goals
All great sportsmen have won the race before they set foot in the arena. As one of the very best, Phelps is a master at visualization:
“There are times in my sleep when I literally dream my race from start to finish. Other nights … I visualise to the point that I know exactly what I want to do: dive, glide, stroke, flip, reach the wall, hit the split time to the hundredth, then swim back again for as many times as I need to finish.”
Think about what it would be like to have enough income coming in to never have to work another day. Or imagine how good it would feel to live in the house of your dreams, seeing the rewards of your financial dedication every day when you woke up in your ideal home.
Only by visualising the rewards will you be able to believe in your financial goals – and if you don’t believe in them, you won’t commit to them…
Lots of rubbish is written about how Phelps’ body makes it easy for him to win races. Sure, he wouldn’t be winning gold medals in the pool if he looked like Danny De Vito.
But Phelps’ genetic edge is the start, not the end, of his story:
When I was growing up, I had five years in a row without taking a single day off. I was in the water every day. And if I can do it for 40 weeks or something, that’s 40 extra workouts that no one else has. That just gives me a little extra confidence.
If you want to invest for the long-term, you’re going to have to make short-term sacrifices. Any money you put into the stock market could be spent on clothes or holidays. Or, if you’re growing a second income stream to supplement your main job, you’ll need dedication to avoid the television and other distractions in the evenings, or to get to work on Saturday morning when the rest of your neighbors are sleeping in.
You might think athletes like Phelps are a breed apart, but often they have to battle to learn these lessons like the rest of us. Even Phelps, according to his coach Bob Bowman:
Michael is much more disciplined than he was in his earlier days. He was, and is still, a pretty strong-willed kid. Back then, he didn’t understand he might have to do some things he didn’t want to do, like train, sit still, pay attention and not talk. He was very energetic as a young boy. These days, he’s modified his behavior – either voluntarily or involuntarily.
That’s what we need to do if we find it hard to commit. Change our behavior until we get the results we want. Nobody is born wanting to save for tomorrow – not when today is so full of temptations. You need to learn to strike the right balance.
3. Be flexible
The reason Michael Phelps has been able to garner so many gold medals is because he competes in several different swimming events. His freestyle crawl is unrivaled, and he’s long been a World Record breaker in the butterfly. Not only that, he also picks up golds for his performance in the individual medley, which adds backstroke and breaststroke to the mix.
The lesson for investors going for gold is to avoid being a one-trick pony. Good asset allocation – where you split your finances between cash, stocks, bonds, property and other classes of investment – is proven to be more important to long-term performance than stockpicking or market timing. Don’t put all your eggs in one basket.
4. Fuel your ambition
Michael Phelps eats more in a day than many of us could manage in a week, says The Guardian:
The average adult man, depending on age, height and weight, requires between 2,200 and 2,800 calories a day. According to most media estimates, Phelps’s daily intake amounts to around 12,000 calories.
Phelps needs all those calories to keep his body on the road despite swimming 50 miles a week in training and boasting more muscles than Mr T. And none of it goes to waste – his body fat has been estimated at just 4 per cent.
The lesson for investors? You need to put fuel in the engine to keep the show on the road. There’s no point you deciding to grow a large enough passive income to replace your salary, if you only then save your loose change in a jam jar.
A 25-year old who commits to investing £100 a month in the stock market might have around £700,000 on retiring in 40 years. If he could find £200 instead, that would balloon to £1.5 million. Worth going short a few curries and beers for, surely?
5. Dream big
Phelps is very likely the greatest Olympian of all time. He’s won six gold medals at the Beijing Games so far, taking his lifetime tally to 12, and only a fool would bet against him winning the two more he wants from this Chinese takeaway.
Many of us would be happy with one gold medal (some of us would be happy to swim a few lengths without wheezing) but Phelps dared to come to Beijing with the audacious goal of winning eight golds. That dream has informed every practice session, every early night, and every mouthful of food (see point four above!) needed to bring him to peak fitness.
If Phelps hadn’t dreamed big, maybe he would have settled for the golds he picked up in Athens. One thing is certain, you don’t win 12 gold medals without daring to dream you can first.
Personally, I know I’m settling too easily in my life too often, when I should be dreaming bigger. I should put more time into my businesses, and I shouldn’t be satisfied saving the same amount of money I was tucking away two years ago. I’m hitting my goals, but I need to go bigger.
What are you settling for? Is it good enough? If you think your finances could do with a new goal, read my article about setting targets that mean something, and try to catch Phelps’ winning his eighth gold in Beijing. Let’s all dare to dream.